The morning news. [volume] (Savannah, Ga.) 1887-1900, 1887-10-19
Protection for Loan Associations.

The loss of So, 900 which the Jasper Loan
Association recently suffered through the
wrongful acts of its Treasurer, and which
was discovered only by accident, suggests
| the inquiry whether the interests OF the
stockholders of these loan associations are
sufficiently protected The loss sustained
by the Jasper association is a heavy one, and
from present indications will have to be
almost wholly borne by its stockholders
The officers who managed its affairs enjoyed
the reputation of being excellent business
men, and were thought to be in every re-
spect well qualified for their trust. In spite
of their ability, however, to manage their
own business affairs they failed to manage
successfully the association committed to
their care by their fellow stockholders.
Upon many of the stockholders of the
Jasper association the loss which they will
have to bear will fall quite heavily, as their
means are small. Any additional tax on
their incomes is a severe burden.
The Treasurer, it is true. was under
bond of $1,000, but the directors of the asso-
citation do not appear to have kept them
selves posted with respect to the ability OF
the bondsmen to meet the obligation which
they had assumed, in case it should become
's,cessary for them to do so. Indeed, it is
not certain that they inquired very closely
into the financial standing of the bondsmen
when they accepted them. 1t is understood
that only one-half of the amount of the bond
can be collected
In this city and other parts of the State,
L.. t,l e.,
the keeping of these loan associations. The
money, as a rule, belongs to those who can
i'll afford to lose it, and who depend upon it
to build for themselves homes, or to afford
them comforts in their declining years. The
associations, to some extent, take the place
of savings banks, and the savings of clerks,
mechanics and even merchants find their
way into them.
The Jasper's loss shows that there is some
ground for assuming that the State should
enact laws for the protection of those who
put their money into these loan associations.
The associations should be treated just as
banks, and other institutions which handle
the money of the people, are. They should
be required to make reports at stated pc
RODS to the Comptroller General, and to
publish them, in order that there may be a
public record, open to every one, of their
condition.
In one of the mutual loan associations of
this city there is an Auditing Committee,
elected by the stockholders, which is indie
pendent of the directors, and which exam
ines its accounts every month. The mem
bers of the committee are not only stock
holders, but expert accountants, and they
are paid for their services. A committee of
this kind affords the stockholders protec-
ton. and at the same time assists the Treas
urer and other officers in keeping the affairs
of the association in good condition.
1t is clear that most of the loan associa-
tons should have greater safeguards thrown
around them either by legislative enactments
or otherwise. They are good institutions,
but another affair like that of the Jasper
association would seriously injure them by
weakening confidence in them. The stock
holders don't get the kind of protection
they want from men who are chosen presi-
dents and directors because they are popu-
lar, from stringent bylaws or from bonds,
men whose wealth cannot be found when it
is wanted